Bosch is a major player in the auto supply chain. The company said it was looking at defence applications for its products. But \u201cregardless of current developments, Bosch does not develop, manufacture or sell weaponry\u201d.<\/p>\n
The cautious tone at Bosch and Volkswagen may reflect a worry that the world isn\u2019t quite ready to see German civilian industry involved in rearmament, which would trigger memories of the Nazi war machine.<\/p>\n
But Matthias Wachter, a defence specialist at the German business lobby group BDI, says attitudes have fundamentally changed.<\/p>\n
\u201cTen years ago, big industrial companies tried to get rid of everything which was somehow defence-related. Defence was like porn and cigarettes \u2013 nobody wanted to get involved, it looked really bad on your corporate social responsibility reports,\u201d he says.<\/p>\n
\u201cNow, really the opposite is the case. It\u2019s about, \u2018How can we help? How can we benefit? How can we bring new technologies and innovation into the armed forces?\u2019\u201d<\/p>\n
Deutz has embraced the shift wholeheartedly. It is not only selling its own products into defence supply chains, but is now buying, or joining forces with, companies in the drone manufacturing industry.<\/p>\n
Schulte says these players have good products, but a company like Deutz can help them scale up production and build out a supply chain. He reckons this is the \u201cblueprint\u201d for how old-school industry can join forces with cutting-edge defence start-ups.<\/p>\n
Other companies are looking to do the same. A few weeks ago, defence minister Boris Pistorius and economy minister Katherina met 100 chief executives from defence and non-defence companies to explore deeper collaboration.<\/p>\n
Keller says this is unprecedented in Germany. When he worked for the then-defence minister Ursula von der Leyen in the 2010s, \u201cnot a single CEO of a defence company was ever seen at the ministry\u201d.<\/p>\n
Adapting to the military<\/p>\n
But rescuing German industry from the doldrums will require more than just money and enthusiasm.<\/p>\n
Not everyone is sure that the government will be able to parlay the budgetary billions into a strategically coherent plan \u2013 one that fosters cutting-edge industries like drones and satellites, rather than just grinds out extra artillery shells and armoured vehicles.<\/p>\n
Experts also warn that many industrial companies will find it difficult to adapt to the military\u2019s complex procurement processes.<\/p>\n
\u201cIt is a highly traditional business. The contracts are usually awarded to companies that are well-known and established in the business. So it\u2019s not easy for new companies to break into that,\u201d says Keller.<\/p>\n
Wachter agrees: \u201cWe always tell our members it\u2019s a long shot, it\u2019s a marathon, and it\u2019s not something which can be easily achieved.\u201d<\/p>\n
Even those who do break in may find that their defence business isn\u2019t on the scale of their traditional one.<\/p>\n
\u201cIn a good year, we are able to produce about 180,000 engines. There\u2019s no way that we\u2019re going to produce 180,000 or even 50,000 or even 30,000 engines for defence applications. We\u2019re talking about a few thousand,\u201d Schulte says.<\/p>\n
\u201cIt is becoming an important part of the business \u2013 in our purpose, the number of employees, the increasing revenue and profitability. But it\u2019s not going to be the dominant part.\u201d<\/p>\n
What\u2019s true for the companies is also true for the economy as a whole, says ING\u2019s Brzeski. The automotive industry accounts for as much as 7pc of the German economy, whereas defence contributes just 0.5pc.<\/p>\n
\u201cWe could see that going to 1pc or 1.5pc this year, but this is not enough to completely absorb weaknesses in the automotive industry,\u201d he says.<\/p>\n
If the government plans carefully, the defence billions could be more than just an economic \u201csugar rush\u201d, Brzeski says, and become a source of longer-term growth based on \u201cmore innovation, and more well-paid jobs\u201d.<\/p>\n
Pistorius has been working on several strategies and plans to guide the defence sector in this direction. But, like a German train, their release is behind schedule.<\/p>\n
Without these, it will be difficult for the bureaucracy, the military and the companies to shift from box-ticking to industry-building.<\/p>\n
The industry is gearing up. But Berlin needs a plan to ensure that Germany gets, almost literally, bang for its buck.<\/p>\n","protected":false},"excerpt":{"rendered":"Bosch is a major player in the auto supply chain. The company said it was looking at defence…\n","protected":false},"author":2,"featured_media":2745,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2956,94,2958,95,5,442,2957],"class_list":{"0":"post-2744","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-automotive-industry","9":"tag-business","10":"tag-defence-industry","11":"tag-economy","12":"tag-germany","13":"tag-standard","14":"tag-top-story"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/2744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=2744"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/2744\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/2745"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=2744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=2744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=2744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}